- SWFX market sentiment is 62% bearish
- 64% of pending orders in 100-pip range are to SELL the Euro
- Strong resistance near 1.24
- Upcoming events: FOMC Member Master to speak, US NFIB Small Business Index
The US government posted a $49B budget surplus in the month of January, the Treasury Department stated on Monday. The report also showed that the US fiscal gap rose 11% to $175.7B in the four month period to January, compared to the same period a year ago.
The gap is anticipated to widen further as an aging population increases spending on retirement programs and healthcare. The proposed budget released on Monday revealed the deficit widening to $984B in 2019, assuming that Congress would adopt all of the President Trump's proposals, including cuts of spending.
Minor fundamentals
No significant fundamentals are scheduled for today. The President of the Federal Reserve Bank of Cleveland Loretta Mester about the economic outlook and monetary policy at 1300GMT, while the US National Federation of Independent Business is to release its Small Business Index at 1100GMT.
EUR/USD poised for 1.24
The Euro was driven by upside risks on Monday. Even though the norhtern side was guarded by a strong resistance cluster formed by the 55– and 100-hour SMAs and the weekly and monthly PPs, the pair managed to gather enough momentum to push through this barrier and thus move away from the bottom boundary of a four-month channel up.The same bullish momentum is likely to prevail during the following hours, as well. It is expected that gains are capped near the 1.24 mark where the upper boundary of a short-term channel down is located. Further upward movement is unlikely, given that this area is likewise reinforced by the 200-hour SMA.
In terms of support, a possible fall should be restricted by the 55– and 100-hour moving averages cica 1.2270.
Hourly Chart
The Euro has been driven by bulls for the third consecutive session, thus falling short from the bottom boundary of the prevailing four-month channel located near 1.2240. This, however, might be a short-term correction against the general bearish trend, as the pair is still expected to approach the 55-day SMA circa 1.21 in the medium-term.
Daily Chart
Traders are bearish
The bearish market sentiment has weakened by one percentage point to 62% short positions in this session.
The outlook for the two currencies against the rest of the traded financial instruments is as follows: the Euro is 66% bearish and the US Dollar is 60% bullish.
OANDA traders remain bearish in this session, as 55% of open positions are short (-5%). The bearish sentiment of Saxo Bank clients stands at 58% short positions (+1%).
Spreads (avg, pip) / Trading volume / Volatility